(Dave Bedard photo)
Article originally published on August 30, 2019 in OrganicBiz
Organic commodities have been put under pressure price-wise ahead of harvest due to co-operative weather and higher-than-expected yields.
“Some yields are sounding really good,” said Scott Shiels, procurement manager with Grain Millers Canada Corp. at Yorkton, Sask.
In particular, oat and wheat yields showed strength.
“If yields continue to be as good as this early stuff, it’ll be hard on the market for a couple of months,” Shiels said.
“With the acres that were planted, and the condition of the crop, it’s definitely going to put pressure on the market through the next couple of months.”
Feed and milling oat prices are around $6 per bushel, and flax for feed is around $32-$33.
The availability of old crops, as producers clean out their bins ahead of harvest, is also contributing to soft prices.
“I think there’s a better crop than everyone thought there would be,” said Bryce Lobreau of Pristine Prairie Organics.
“There are more areas with good crops than bad out there.”
Richard Reimer of Growers International said old- and new-crop organic wheat prices have “been on the decline” in order to keep up with large carryover stocks both domestically and abroad.
“Values are on the decline to keep up with where prices have been in the rest of the world,” he commented.
Hard red wheat prices are around $13-$15 per bushel.
Sluggish prices are par for the course as new crops come off the field during harvest. As inventories deplete later in the year, prices are likely to firm up again.
“When we get into that early part of the winter, we’re going to see a bit of increase in demand,” said Shiels.
“That will allow us to get out and be a little more aggressive in the market.”
Jason Freeman of Organic Trade Solutions said some organic pea prices dropped as much as 10 cents ahead of harvest.
“Buyers aren’t quite ready to commit on price. They’re waiting to see what harvest brings,” he said.
While early harvest yields have been strong, concerns of early frost overhang the Prairies. Frost damage could potentially downgrade crops to the point that “prices could be up two or three bucks by Christmastime,” said Shiels.
“People are eager to see where new-crop harvest leads us,” Reimer said.